Loews Corp. plans a $70 million renovation of the Loews Regency Hotel New York, a 354-room luxury property on Park Avenue in Manhattan, as the company focuses on the city in an expansion of its hotel division.
The upgrades should be completed by February 2014, when the National Football League’s Super Bowl will be held at MetLife Stadium in nearby East Rutherford, New Jersey, said Paul W. Whetsell, chief executive officer of Loews Hotels. The venue is the shared home of the New York Giants, which is 50 percent-owned by members of the Tisch family, Loews Corp.’s founders.
“You know what’s happening in New York in February of 2014?” Whetsell said in an interview yesterday at the Regency’s The Library lounge. “The Super Bowl will be here. We want to definitely be done by then.”
The Regency renovation, which will be done in stages to avoid service disruptions, is part of an initiative to overhaul and bolster Loews’s hotel business, its smallest unit. Whetsell, who was hired by the New York-based insurance and energy holding company in January, plans to more than triple the division’s net income by the end of 2015 and increase its hotel count from 18 to about 30. It will probably make a “major” acquisition in Manhattan by the end of the year, Whetsell said.
The hotel division contributed $4 million to Loews Corp.’s $367 million of net income in the first quarter, according to a filing with the U.S. Securities and Exchange Commission.
Loews is willing to pay more than $500,000 a room for properties in New York, Whetsell said. He expects to boost the number of hotels from one to as many as four in the city.
Outside of New York, Loews is looking to pay as much as $400,000 per room for hotels in major cities. The company expects to complete three acquisitions and announce one ground-up development before year’s end, Whetsell said.
The CEO is looking for high-end hotels that are in need of renovations and cater to business groups and corporate travelers, such as the Renaissance Hotel & Spa in the Hollywood area of Los Angeles that it bought from CIM Group last week. Loews will have a heavier focus on individuals to balance out a drop in group bookings during economic slowdowns, he said.
Loews Hotels is ultimately aiming for a similar business model and portfolio size as Four Seasons Hotels Inc. and Marriott International Inc.’s Ritz-Carlton brand, with about 60 to 70 properties, Whetsell said. The company is considering partnerships and buying other hotel portfolios to accelerate its expansion.
“It would take a long time to get there by just doing one-off deals,” Whetsell said. “Ultimately, buying another company or a portfolio of hotels will get us there more quickly.”